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How late can I move in to my PPOR?

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Dear ATO team member,
 
I have utilised the FHSS to buy my Principal Place of Residence, which is currently tenanted. The tenants have requested an extension to live there. How late can I move in to my PPOR? The ATO website shows the information below.

You can use this scheme if you are a first home buyer and both of the following apply:
  • You either live in the premises you are buying, or intend to as soon as practicable. 
  • You intend to live in the property for at least six months within the first 12 months you own it, after it is practical to move in.
When does the first 12 months you own it begin - date of contract or date of settlement? What happens if I am unable to move in by that date?
 
Regards,
Creski
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Anonymous

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Hi @creski 

 

You should think carefully before you do that because if you give your tennants an extension of time you may no longer be eligible for the FHSS, and this means you will loose all the benefits of the scheme and I shall try to explain to you why.

 

Paragraph 16 of ATO Law Companion Ruling LCR 2018/5  provides all of the conditions that must be met after the release of funds under the FHSS scheme.   The relevant parts that affect your senario are:

· you have occupied the premises, or intend to occupy the premises as soon as practicable

· you intend to occupy the premises for at least six months of the first 12 months after it is practicable to occupy the premises. Determining when it is 'practicable' to occupy the premises will depend on the facts and circumstances of a particular case. However, it is necessary for your intention to occupy the premises for the requisite period of time to be genuine[30], and

 

The second dot point it has a reference " [30] "   that refers to Paragraphs 1.181 to 1.183 of the Explanatory Memorandum  (which explains how the legislation works). 

 

Paragraph 1.183 of that Memorandum states:

" However, an individual could be regarded as having never had the intention to occupy the dwelling for the necessary period if they made no efforts to do so, or if the reasons for not having done so were entirely within their control. For example, if an individual purchased a dwelling and within a short period of time listed it on the rental market under a 12 month lease, it is unlikely that they would be able to demonstrate that they had intended to occupy the dwelling. "

 

This means that under your senario, giving the current tennants an extension of time is entirely under your control because even though they may have requested an extension it is your choice whether you give it to them or not, and therefore you would be considered as not having an intention to occupy and you would not qualify for the scheme. 

 

Once you do not qualify for the scheme you may be liable for the FHSS tax on any assessable amounts that were released to you under the scheme, refer to the ATO Law Companion Ruling LCR 2018/5  paragraphs 28, 29 and 30.

 

Just remember the entire purpose of the FHSS Scheme is to assist with the purchase of your first principal place of residence, it is not for any other purpose including renting the property out. 

 

If you need further assistance you can contact the ATO super team on SuperAdvice@ato.gov.au or for general super information phone 13 10 20   8.00am and 6.00pm - local time - Monday to Friday, except public holidays.

 

1 REPLY 1

Best answer

Anonymous

Replies 0

Hi @creski 

 

You should think carefully before you do that because if you give your tennants an extension of time you may no longer be eligible for the FHSS, and this means you will loose all the benefits of the scheme and I shall try to explain to you why.

 

Paragraph 16 of ATO Law Companion Ruling LCR 2018/5  provides all of the conditions that must be met after the release of funds under the FHSS scheme.   The relevant parts that affect your senario are:

· you have occupied the premises, or intend to occupy the premises as soon as practicable

· you intend to occupy the premises for at least six months of the first 12 months after it is practicable to occupy the premises. Determining when it is 'practicable' to occupy the premises will depend on the facts and circumstances of a particular case. However, it is necessary for your intention to occupy the premises for the requisite period of time to be genuine[30], and

 

The second dot point it has a reference " [30] "   that refers to Paragraphs 1.181 to 1.183 of the Explanatory Memorandum  (which explains how the legislation works). 

 

Paragraph 1.183 of that Memorandum states:

" However, an individual could be regarded as having never had the intention to occupy the dwelling for the necessary period if they made no efforts to do so, or if the reasons for not having done so were entirely within their control. For example, if an individual purchased a dwelling and within a short period of time listed it on the rental market under a 12 month lease, it is unlikely that they would be able to demonstrate that they had intended to occupy the dwelling. "

 

This means that under your senario, giving the current tennants an extension of time is entirely under your control because even though they may have requested an extension it is your choice whether you give it to them or not, and therefore you would be considered as not having an intention to occupy and you would not qualify for the scheme. 

 

Once you do not qualify for the scheme you may be liable for the FHSS tax on any assessable amounts that were released to you under the scheme, refer to the ATO Law Companion Ruling LCR 2018/5  paragraphs 28, 29 and 30.

 

Just remember the entire purpose of the FHSS Scheme is to assist with the purchase of your first principal place of residence, it is not for any other purpose including renting the property out. 

 

If you need further assistance you can contact the ATO super team on SuperAdvice@ato.gov.au or for general super information phone 13 10 20   8.00am and 6.00pm - local time - Monday to Friday, except public holidays.

 

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